The Blame Game Surrounding the 2013 Holiday Surge

On the day before the Christmas holiday, general and social media across the United States nearly all elected to dump on UPS as the Grinch that stole Christmas.

The global carrier had to alert customers and shoppers that its network was overwhelmed on the last days before the holiday and that some shipments would not arrive at their destinations by the holiday. This condition was probably not just a condition at UPS but other package delivery firms as well, including FedEx. Only UPS elected to “man-up” and admit the condition, allowing its workforce to celebrate a well-deserved Christmas holiday with family and friends instead of having to work through the actual holiday to deliver pacakages.

Supply Chain Matters does not elect to point any fingers at carriers and package delivery firms. As we observed in a previous commentary, this was an especially challenging surge holiday buying period. The shopping calendar was condensed by at least a week, and was plagued by terrible winter storms and travel conditions causing disruptions. For the package delivery firms, there was not just a single surge day, but multiple days. Retailers called on every available marketing and sales promotional tactic to get consumers to buy. Capacity and equipment was often taxed and utilized far beyond planned expected volumes.

More consumers elected to shop online because of the winter cold and storms, not to mention crowds and congestion at shopping malls and retail stores. This past weekend, another winter storm featuring icing conditions made its way from the central part of the U.S. all the way up the eastern seaboard. One of UPS’s biggest choke points was the Dallas-Fort Worth area, where ice conditions temporarily halted by air and ground operations during the immediate days leading up to the holiday.

By our view, if there is need to caste blame or point fingers, let them be pointed directly at the online retailers and fulfillment firms that created the marketing expectations that shoppers could wait to the very last minute and get guaranteed delivery by the holiday.

Whether we choose to acknowledge or not, there are consequences when transportation and logistics networks are disrupted by weather or extraordinary volume surges. Anyone who knows a UPS employee or ever had the opportunity to tour its facilities is well aware that every conceivable task and work plan is geared toward maximum productivity. Contingency plans include back-up aircraft, delivery vehicles and thousands of temporary employees that added just for this period. With all of this detailed planning, networks were still overwhelmed.

UPS and other carriers will resolve the current backlog in short order and packages will reach their destinations, albeit a little late. Rest-assured, there will be lots of post-holiday time dedicated to the detailed analysis of what happened and how and if it can be avoided, if at all, by next year’s holiday season, which is also a condensed calendar period.

We as online or last-minute consumers have to do our own soul-searching as well.

Have we become so accustomed to the material aspects of having the latest and coolest gifts, delivered overnight, regardless of weather?

Rather than the need for media to point fingers or seek a scapegoat, it should rather be a self-reflection on how we have perhaps lost a perspective on the dependence we have on people vs. objects and promotional marketing. Supply chains are not bullet-proof. They are vulnerable, particularly when they are stressed to their upper most limits.

It will always be dedicated people that make any supply chain deliver expected outcomes. They deserve their holiday and our praise for the work that performed so that each of us could celebrate during the holidays.

Eytan- Even now certain online retailers are starting to admit that they pushed the envelope on guaranteed delivery at the last minute. Amazon signed up over one million subsribers to their Prime program (includes free shipping) one week prior to the Christmas holiday. That should have been an important alert to what was about to happen.

The important learning is that there is no such thing to virtual capacity at the last minute ship crunch time. Hopefully brick and mortar and online retailers will learn how to collaborate on last-minute shipment surges.